June 17, 2024


World Business Inquiries

Airlines seek 1-yr waiver of fees

2 min read

The country’s biggest airlines are asking the government for free plane parking and rental fees for a whole year as losses mount due to the new coronavirus disease (COVID-19) pandemic.

Air Carriers Association of the Philippines (Acap) vice chair Roberto Lim told the Inquirer they had a pending request before the Department of Transportation to waive navigation, aviation, parking, leases and rentals through May 2021.

Billions of pesos in revenues have already vanished following global travel bans and lockdowns. Until a vaccine is discovered, recovery is expected to be slow even if airlines start operating again after strict quarantine measures are lifted on May 15 this year.

“All Acap carriers are ready to resume domestic service albeit on a smaller scale due to dampened travel demand,” Lim said.

“Public health is a priority and we want to avoid a relapse so we must obey [President Duterte’s] decision. The focus now is how best to quickly restart air connectivity of the islands for economic development,” he added.

Acap is comprised of Philippine Airlines, Cebu Pacific and AirAsia Philippines. Earlier estimates put their combined losses at about P7 billion from refunds as of early April 2020.

Acap members also incur fixed spending of about P8 billion a month, Lim said.

Such conditions are affecting the bottom line in a significant way. Cebu Pacific, the country’s largest budget airline, swung to a loss of P1.18 billion in the first quarter of this year. This was a stunning reversal from its P3.36 billion in net profit in the same period of 2019.

Cebu Pacific said revenues fell after the new virus disrupted the travel plans of 900,000 flyers during the first quarter alone.

Acap is also actively lobbying the Philippine government for financial relief through emergency loans and debt guarantees to prevent potential bankruptcy.

Citing planned stimulus legislation to support the Philippine economy battered by the coronavirus, Lim said “the airline, travel and tourism industry hopes to be included in the financial assistance.”

Earlier, the trade group of the world’s airlines called on governments in the Asia-Pacific region to extend emergency support to the industry devastated by the COVID-19 crisis.

The International Air Transport Association said it wrote the heads of governments in the region to provide financial support as carriers “fight for survival due to the dramatic loss of air travel demand due to the COVID-19 crisis.”

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